Spark has rolled out two new products aimed at channelling its decentralized finance (DeFi) stablecoin reserves into institutional credit markets, marking a fresh push to connect onchain liquidity with traditional finance.
The decentralized asset allocator on Wednesday introduced Spark Prime and Spark Institutional Lending, a suite designed to help professional borrowers tap stablecoin loans without having to operate their own DeFi infrastructure.
Announcing Spark Prime: CeDeFi Margin Lending
Powered by @ArkisXYZ‘s margin technology, Spark Prime enables institutional borrowers to deploy collateral seamlessly across DeFi and CeFi venues.
Spark Prime provides:
▪ More resilient delta-neutral lending supported by… pic.twitter.com/vz08oXCEtR
— Spark (@sparkdotfi) February 11, 2026
Spark’s core contributor, Phoenix Labs, whose team previously worked on MakerDAO’s stablecoin and risk systems, said the new offerings simplify institutional access to DeFi-native capital while maintaining compliance and risk controls.
Prime targets trading desks, custodial markets
Spark Prime is built around margin-style lending and off-exchange settlement, powered by Spark’s liquidity engine. The product is designed for trading firms and capital allocators seeking flexible access to stablecoin credit without directly managing DeFi positions.
Early launch partners include Edge Capital, M1 and Hardcore Labs. Spark Institutional Lending takes a more compliance-focused route, integrating Spark-governed markets with qualified custodians such as Anchorage Digital. This structure allows clients to keep collateral within regulated custody frameworks while still accessing onchain liquidity.
Coinbase, PayPal integrations strengthen Spark’s footprint
Spark has already established itself as a significant liquidity provider in major stablecoin markets. Data from DeFi Llama shows the protocol currently holds about $5.24 billion in total value locked (TVL), down from its November 2025 peak of $9.2 billion but still placing it among the larger DeFi money markets.
For context, Aave leads the sector with roughly $27 billion in TVL, while Maple holds around $2.1 billion.
Spark says it supplied more than 80% of the USDC liquidity for Coinbase’s Bitcoin-backed loan market built on Morpho, contributing to approximately $500 million in loan growth within three months. Public dashboards indicate Spark-linked vaults have deployed over $600 million into that market since launch.
PayPal’s PYUSD program has also drawn on about $500 million in Spark-governed liquidity to deepen onchain markets for PYUSD and other stablecoins.
The launch comes amid a broader crypto market downturn. While total DeFi TVL has fallen about 20% from late January levels to roughly $96.5 billion, the decline has been less severe than that of major tokens. Over the same period, Bitcoin dropped roughly 25%, and Ether slid about 35%, according to Coingecko data.
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